I have spent 20 years working in nonprofit think tanks, the last 13 as a resident scholar with the Institute for Policy Innovation in Dallas. I also ran the Washington, D.C.-based Council for Affordable Health Insurance for nearly nine years. While I cover a range of political, economic and policy areas, I specialize in health policy. Prior to joining the think tanks, I taught philosophy. I received all three of my degrees—BBA in economics, masters in divinity and Ph.D. in humanities—from Texas universities. I was an ethicist for a medical school's panel reviewing human experimentation. I'm a member of the U.S. Commission on Civil Rights Texas Advisory Committee. For several years I was a political analyst for the USA Radio Network, and I hold a 6th degree black belt in Tae Kwon Do and still teach.

9/01/2011 @ 12:41PM19,578 views

Yet Another (Failed) Obama 'Jobs Plan'

President Obama’s forthcoming “jobs package” is what the country gets when it elects a president who spent more time organizing people than hiring them.

Obama needs desperately to find a way to boost job creation—both for the country’s sake and his own political future—and yet previews of his speech allow me to make an early prediction: The economy will continue to sputter and unemployment will remain in the 8 percent-plus range until, well, January of 2013 (if you know what I mean).

The president persists in pushing programs that cost billions of dollars and do not create sustainable jobs, and he refuses to embrace policies that will.

Take, for example, the hints that Obama wants to expand his job-subsidization efforts to the private sector by giving employers a tax break to make it less expensive to hire workers. This from the man who has made the cost of hiring new workers so expensive, and the cost of regulatory compliance so unpredictable, that many employers refuse to hire.

Obama supported an increase in the minimum wage as a senator;

He has imposed countless new costs on business by pushing through his trillion-dollar-plus health care legislation and his financial reforms, including 4,870 Federal Register pages of proposed regulations on banks; and

There are 219 new regulations for 2011 that impose economic costs of more than $100 million each, and seven are being considered that would exceed $1 billion each.

All of the above significantly raise the cost of doing business and hiring new employees. So now the president wants to provide businesses with a subsidy to make it less expensive to hire a new employee.

Every business owner knows the subsidies are temporary, while the new costs and regulations are permanent—at least as long as Obama is in office. So while the president’s proposals might produce a little hiring at the margins, it will be nowhere near what we need to jumpstart the economy.

And even as the president claims he is now laser-focused on job creation, he wants the public to forget all of his previous taxpayer-funded efforts to create mostly those “green jobs” of the future, many of which have been abject failures.

Like the $20 million federal grant given to Seattle to weatherize houses. The promise? To create “2,000 living-wage jobs in Seattle and retrofitting 2,000 homes in poorer neighborhoods,” according to the SeattlePI. The reality a year later, “only three homes had been retrofitted and just 14 new jobs have emerged from the program.”

The much-hyped company Solyndra, which manufactures—um, make that “manufactured”—solar technology, has closed its doors and filed for Chapter 11 bankruptcy. Only a year ago Obama gave it $535 million in low-cost loan guarantees, touting the company “as a prime example of how green technology could deliver jobs,” according to an NBC-affiliate report. Now another 1,000 people have become unemployed victims of Obama’s job-creating skills. And taxpayers have become victims of another half-billion dollars sucked down the Obama job-creating drain.

Mr. Job-Creator also went to Michigan in August to puff his government handouts. He said at Johnson Controls, “We know there are things we can do right now that will help accelerate growth and job creation—that will support the work going on here at Johnson Controls, here in Michigan, and all across America.” As was widely reported, the company added about 150 jobs—at an average cost of about $2 million each.

Perhaps the best example of the president’s job-creation failures is his “green car” efforts. Talk about driving the economy into the ground! The president has set a goal of 1 million plug-in cars by 2015. And so he started doling out taxpayer money, announcing a $2.4 billion program in March 2009. Since the government was a majority stakeholder in GM at the time, the Chevy Volt became a model to be emulated. Except … well, nobody wants it. GM only sold 125 Volts in July—and that’s with the government buying some of them. At that blistering sales pace we could hit, oh, maybe 4,000 on the road by 2015.

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Another source pointed out how about 50% of the jobs the admin claimed credit for creating were only shifted from one employer to another… at taxpayer expense.

Regarding the green cars, I agree the Volt will likely fail long term due to the cost of having two expensive drivetrains in the vehicle, however the short term sales numbers are due to production constraints… so not fair to quote them. Nissan and Ford also received loans from the DOE and Nissan already has 6,000+ LEAFs silently plying our roads with hundreds of thousands more on the way — from Tennessee starting late 2012. Ford will likely have the Focus EV on sale by the end of the year. Those are real jobs and have compound benefits.

Overall having Obama hand out gifts to friends and cronies has not been and will not ever be a stimulus success story. However in the few cases were money was loaned to companies with a viable business plan to kick start them it can be a good investment.

Kovalb: Good points. If the government wants to act like a venture capital firm, that’s a political decision–though it may be a bad one. But Obama isn’t asking which technology companies have a viable business model and a reasonable chance of doing well. The administration seems to ask, which companies support the president’s message and efforts to create green cars, whether the public wants them or not. As you point out, that opens up a whole world of cronyism. My own sense is that the public will gradually buy more green cars once they find something they like and meets their needs.

The greatest potential for increasing jobs will come from government getting out of the jobs business altogether. Any economist worth his salt knows that money spent by the government does NOT increase the prosperity of the country (and should in any way be included in the GDP), therefore it follows that any government money spent on any kind of jobs program only produces an illusion of jobs growth. (If an economist thinks that government spending should be part of GDP, he ought to be fully ignored.)

I should also like to point out that there have been presidents (not many) who do know something about managing a business, but we have not had a single president ever (maybe one or two of the first few presidents, maybe not) who really understood economics and the monetary system and also wants to do the right thing for the country. Certainly, every president of the 20th and 21st century has not done right in economics or job creation. Instead, they have been self-serving, serving of the financial community, mainly the big bankers, and serving of politicians in general. It is truly an unholy alliance between our government leaders, the big bankers and the Fed. Through the Fed and the big bankers, the politicians have through essentially unlimited borrowing and the creation of money out of thin air, the ability to do anything their little hearts desire. And what they desire is more power and control in government through government doing more and more of everything for everybody — cradle to grave, as it were. So, to get the illusion of a few jobs (I never got one.) and a host of other government “benefits” that are also illusory, we give up our liberty.

Is there a solution? I really don’t know what kind of president he might make overall, or that he wouldn’t be totally frustrated in his economic efforts, but I can say for certain that Ron Paul is the one man that is even considering a run for president that really understands economics, both how we got in this current mess and how we can get out, and could potentially be the catalyst of change that could set this country on the road to true prosperity.

Mr. Obama was right when he said it was time for a change, except he was not and is not the change that we need. In economics, Obama’s only change from George Bush was a change for the worse – much worse. We need a change to go the other direction.

The loss of an entire fishing season in an area larger than the size of New England, and in the most productive waters in the world, has cost the US economy FAR more than all the mineral leases from everywhere took in. The Mecondo spill threw over 200,000 fishermen and related jobs out of work. About 3/4ths of the $20 billion set aside by BP to pay liabilities remains unpaid, and BP is refusing to honor its commitments or process any claims.

This years catch has only been slightly over 1/2 that of pre-spill years.

—–” Plus, not only won’t it cost a dime but, in the case of the mineral leases, will actually directly increase revenue”——–

The entire amount taken in by the US Treasury on all mineral leases of all kinds in 2009 was $10.8 billion. The US economy will be paying for the Mecondo spill for probably the next 30-40 years.

In order to just pay for the expenses of environmental protection and clean up which the oil companies have clearly shown they will not do on their own—-we would have to increase the mineral lease payments X10, back to pre 1980 levels. Currently, the US has the lowest mineral lease payments in the world.

The oil industry employs about 17,000 people either directly or in related dependent jobs.

Putting 200,000 to 300,000 people out of work to maintain 17,000 jobs is not good economics.

We already know that oil companies will cut corners to increase profits at the expense of people and environment—-the Mecondo spill has shown that. Allowing the drilling of even more wells under the same conditions only increases the chances of another major spill happening.

It is betting the family farm against a handful of magic beans. The roulette wheel is rigged. And the beans aren’t magic—-they are non renewable.

Sugarcane grows just fine in Louisiana and anywhere else along the Gulf Coast. We can make ethanol from sugarcane, we’ve been doing it for centuries. We can use ethanol in place of gasoline—-and we can do it without endangering people’s health or destroying the environment. And we can keep right on doing just as long as we need ethanol. And we can employ a lot of people by doing so.

We don’t need oil. And we do not need the destruction of people’s health, livelihoods, economy and environment.

Fred: not sure where you got the notion that the oil industry employs about 17,000 people directly or indirectly. Most numbers I’ve seen has it at about 2 million directly employed. ExxonMobil apparently has around 83,000 by itself.

—-” Fred: not sure where you got the notion that the oil industry employs about 17,000 people directly or indirectly.”—–

Bobby Jindall, governor of Louisiana gave that number as the number of people employed either directly or indirectly in the State of Louisiana when he was pushing a resumption of drilling operations off the Louisiana coast.

The oil industry gives the number of people employed in the industry in TV ads, as 9.2 million. What is not being said, is that MOST of those jobs are overseas. The actual number of people working in “oil and gas related” jobs in the US is 2.1 million(their own estimate—as published on the API website). There is no breakdown of jobs or types, so it is anyone’s guess how they define “related”—-although it surely includes temporary workers on environmental clean ups—-and I don’t know how much further they stretch it. Maybe they define handing you your happy meal at a McDonald’s drive through a “petroleum related job”. Considering past performance at producing factual information and dissemination—-I wouldn’t be too surprised if this were the case.

The US Department of Labor however, does collect and maintain information on oil and gas production jobs. The US Department of Labor says that ~ 63,000(and a few) jobs are directly related to oil and gas production in the US.

That is a LONG way from the 9.2 million that is splashed all over the TV commercials.